Noted real estate consulting firm Pinnacle offers an in-depth look at the Philippines’ real estate industry for the first nine months of 2015
As the Philippine real estate industry enters a brand new year, services provider Pinnacle Real Estate Consulting Services, Inc., analyzes the first nine months of 2015, while also giving their insight on how these activities can affect the property landscape in 2016.
From a macroeconomic standpoint, the Philippines is stable, Pinnacle said. According to the Philippine Statistics Authority, the country’s gross domestic product grew by 5.3%. The Banko Sentral ng Pilipinas says that net foreign direct investment into the Philippines shows consistent growth, and the Department of Tourism reported a 10.76% increase in visitor arrivals for the January–September 2015 period compared to the same period in 2014.
With this year being the Year of the Monkey, Pinnacle likened the country’s big developers to gorillas who are dominating the real estate “forest.” Leading the troop is Ayala Land with their Php75.1 billion revenue in the January–September 2015 period, followed by the SM Group as it maintains its position on the top of the retail market; and Megaworld, which launched five integrated townships in 2015, bringing its total to 20.
Pinnacle believes the office market will be propelled by robust demand from the business process outsourcing (BPO) industry. The strong take-up of office space during the third quarter of 2015 shows that even as developers continue to build office towers, vacancy will hold, particularly in high-demand business centers like the Makati CBD and Bonifacio Global City.
Pinnacle also mentioned that according to an HSBC economist, the BPO industry’s revenues are predicted to overtake overseas Filipino worker (OFW) remittances in two years.
The residential segment, Pinnacle reports, remains very competitive even with the slight increase of prices. There is also a noticeable growth in the rental segment, with investors buying and leasing out condo units for profit. Supply will also be consistent: SM Group’s SMDC will begin selling an average of 20,000 units per year, DMCI Homes plans to launch 14,000 units this year, and Ayala Land and Ortigas & Company will be packaging their residential projects with mixed-use developments and townships.
One notable developer showing a lot of activity in the socialized housing segment is Ayala Land, which is ramping up projects under its affordable brands Amaia and Bella Vita.
The SM Group continues to maintain its strong foothold in retail, with 55 malls, 41 SM Supermarkets, 43 SM Hypermarkets, 127 Savemore stores, and 27 WalterMart stores. SM is closely followed by Robinsons Land, which currently has 37 malls and 400 Ministop branches. Costo/Puregold Group, meanwhile, is operating 36 stores.
Gaining momentum are Ayala Land, who is planning to open five new malls in the next five years and has partnered with Metro Retail Stores for projects in Bacolod, Iloilo, Cebu, and Cainta; Megaworld, who is increasing its retail activity with 20 malls in the pipeline over the next five years; and Vista Land, who has finalized its merger with Fine Group by acquiring 88.25% of Starmalls, Inc. The brand also plans to open six or seven “AllHome” stores in their housing projects every year in the next five years.
Hotel and gaming segment
Despite a slight dip in hotel occupancy rates in Manila (1.6% lower than 2014), the Philippines is still said to be doing better than other Southeast countries. Many developers show their confidence in the country’s tourism future by beefing up their hotel and gaming projects.
Robinsons Land is growing its Go Hotel brand, while Filinvest Land’s newly rebranded Chroma Hospitality, Inc. is projected to offer 5,000 units in Alabang and Cebu by 2020, and is planning to launch more hotels in Metro Manila sites as well as locations in provinces. Ayala Land plans to expand its Seda brand across the country, while Rockwell Land recently opened its first Aruga hotel-serviced apartments in Makati.
The biggest news in the industrial market is Filivest Group’s winning bid to develop the over-200-hectare Clark Green City. Pinnacle predicts it will be a mixed-use project that will include industrial/manufacturing spaces to accommodate the incoming international manufacturers.
Another big-ticket project is Ayala Land’s Alviera Industrial Park in Porac, Pampanga. According to reports, Alviera—an industrial park that is said to target companies in light to medium, non-polluting ventures—has already pre-sold some of its lots.
Read the full report here.
Pinnacle Real Estate Consulting Services, Inc. is composed of experienced professionals providing a full range of services to buyers, real estate lenders and investors. For more information about their services, visit www.pinnacle.ph or contact (02) 859-1000.